I am a reporter and researcher focused on energy, political and economic issues in the Mediterranean and have spent much of the last fifteen years working and reporting from the region. Over the last several years, my work has focused on all facets of the energy sector, including investment, development and policy issues. I am a graduate of the University of Texas’ School of Journalism and New York University’s Center for European and Mediterranean Studies graduate program. https://twitter.com/coatschristophe

Will Greek Elections Dash Athens' Solar Dreams?

A worker waves as he walks in a solar farm in some 110 kilometers north of Athens on November 11, 2010. With agriculture in Greece facing a bleak future from rising costs and falling produce prices, thousands of farmers now want to join a government-backed, self-financed programme unveiled this summer to sow solar farms in the Greek countryside. The programme offers both farmers and the state-owned electricity operator PPC, which controls most of the energy market, a way out of a looming impasse. (Image credit: AFP/Getty Images via @daylife)

As talk of Euro crisis remedies recently shifted from austerity to growth, one lifeline floated by Athens was the country’s Helios Solar project – an expansive green energy farm with an initial production of 2GW and eventual output of 10GW. Proponents of the effort argued that the farm would serve to increase the country’s green energy input and, more importantly, help pay for Greece’s currently unmanageable debt through sales to European neighbors, namely Germany. Helios could help harness the Mediterranean country’s enormous solar potential, while offering some positive growth and confidence in a country in dire need of both.

The only problem, it seemed, was the $27 billion price tag, which would be a hard sale for anyone, but especially a government barely able to keep basic services in place, let alone float enormous new development projects. For a short while, the project was kept afloat by the prospect of a European Union structural reserve, with Greek Prime Minister Lucas Papademos and European Commission President José Manuel Barroso introducing the possibility of about 12 billion in unspent funds earlier this year. While it may not have been enough to not cover the estimated $27 billion cost of the project, it would certainly help get things moving and offer a bit of confidence to outside industry and financial investors.

However, as the country moves closer to Sunday’s elections, it’s looking more and more likely that the strong connection with Brussels needed to ensure those funds is at risk, no matter who comes out on top.

If the left-leaning, anti-bailout SYRIZA party wins an outright majority, it has pledged to take a hard line towards renegotiating its agreements with the country’s creditors, including the European Commission, the International Monetary Fund, and the European Central Bank. That kind of move is likely to result in the kind of strained relations with the rest of Europe that would make structural funds a fantasy and possibility put the country firmly on track for an exit from the currency within a few months.

Separated from their opponents by a thin margin, the right-leaning, pro-bailout New Democracy would face challenges all their own, including a tough road to a parliamentary majority, making further EU-proposed cuts and funding negotiations all the more difficult to pass. Even if they were able to achieve a two or three party coalition, it “would most likely prove unstable, and the cabinet would face considerable resistance in and outside parliament from a strengthened SYRIZA in opposition,” wrote Eurasia Group’s Head of Practice, Wolfango Piccoli in a report on the election this week.

Although Greek election laws forbid polls within two weeks of election day making predictions difficult, who ever wins will find it difficult to keep the country in a place where the kind of EU funds necessary to kick-start the Helios project would be even possible. Without EU input, there is little chance of kick-starting the project and if the EU cannot find a reason to invest in Greek solar, its unlikely anyone else will either

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.